Natural Gas Storage: +47 Bcf
Implied flow indicated a 55-Bcf addition, but 8 Bcf was reclassified from working to base gas in the South Central.
The U.S. Energy Information Administration reported a weekly injection of 47 Billion Cubic Feet (Bcf) in Lower 48 natural gas storage inventories for the week ending September 20, 2024 (Link). Total inventories now stand at 3,492 Bcf, 159 Bcf (4.8%) above year-ago levels and 233 Bcf (7.1%) above the 2019-2023 average for the same week.
Today’s reported storage injection of 47 Bcf was skewed lower because of a reclassification in Salt storage in the South Central. This essentially removed 8 Bcf from working inventories by virtue of those volumes now being considered base gas that is not available to the market. The real indication of weekly supply and demand is the “implied flow” number of 55 Bcf, which is what would have been added to underground storage without considering the reclassification. This number was mostly in line with market expectations, as published forecasts ranged from 45 to 59 Bcf and centered around a 54-Bcf build.
Even without considering the reclassification, the implied flow was again light compared to historical benchmarks. The five-year average for the same week shows an increase of 88 Bcf, while the year-ago build was 82 Bcf. The surplus to each of these benchmarks has now dropped to the lowest since January. The tight underlying fundamental balance has led to an especially light injection season, with the seasonal build to date of 1,233 Bcf coming in as the third lowest over the same period since at least 2010.
Today is the final day of trading for the October 2024 NYMEX futures contract, so volume on the front of the forward curve is relatively light. The more actively traded November contract pushed lower immediately following the data release and continued in that direction as the market digested the data in the ensuing 45 minutes prior to this writing. Futures pricing has been especially strong since last Friday, and even with today’s pullback, the forward curve through next summer sits well above week-ago levels.
Salt inventories in the South Central registered a draw due to the 8-Bcf reclassification, but the implied flow into that type of storage was positive, which is typical at this point in the season. All other regions saw net builds and currently sit at a surplus to both last year and the five-year average for the same week. Mountain Region stocks continue to set new record highs on a weekly basis.
Pinebrook Energy Advisors projects storage inventories to peak near 3.85 Tcf in November before the onset of winter withdrawal season. This number is highly dependent on weather patterns between now and the end of summer, as lingering heat and/or early cold could lead to a lower storage outcome.
Detailed Data with Updated Charts in the Natural Gas Storage Report PDF Below: